Can This Gadget Suck Money Out of Your Wallet?

Category: Gadgets

In June 2016, it was revealed that the Oklahoma Department of Public Safety has purchased and tested handheld electronic devices that allow law enforcement agents to collect data from any magnetic-stripe card. The alarming news is that police can now tell how much money is “stored” on a prepaid debit card, freeze it so that no one can access it, or even transfer the stored funds to the police department’s own bank account. But that’s only part of the story…

Police Can Now Seize Money From Prepaid Cards

The Electronic Recovery and Access to Data (ERAD) Card Reader traces its origin back to the Department of Homeland Security Science and Technology Directorate, which began research back in 2012 that led to the ERAD Card Reader.

According to the DHS, "During arrests of criminal couriers, law enforcement officers rarely find bundles of cash wrapped in rubber bands anymore. Instead, they find stacks of plastic cards — bank credit and debit cards, retail gift cards, library cards, hotel card keys, even magnetic-striped Metrorail cards — that have been turned into prepaid cards."

The official purpose of ERAD is to cut down on identity theft. If the cardholder information stored on a prepaid card does not match that of the person who has it, that’s considered grounds for “reasonable suspicion” that the card is stolen. Further police investigation and action is justified, up to and including civil asset forfeiture action against the card itself.


DHS brags on its site that ERAD “is becoming a vital tool for law enforcement seizing these cards and funds associated with criminal activity.” But unfortunately the technology is not confined to use against suspected drug couriers with stacks of cards. There have been reports of police using it to extract funds from a single card in a driver’s wallet during a traffic stop.

Now, let’s consider a hypothetical case. You buy a prepaid gift card from Visa, Starbucks or Bed, Bath, & Beyond. As the buyer, it is your personal data that’s encoded into the gift card’s magnetic stripe. Then you give the card to someone because, you know, you bought it as a GIFT! The recipient - perhaps your spouse, child, or co-worker - gets stopped for having a broken taillight. When the police officer discovers the gift card and runs it through an ERAD reader, he suddenly has “reasonable suspicion” that the card has been stolen. Then the fun begins in earnest.

A lot more questions may be asked by the officer, all of them designed to trip up the increasingly nervous and frustrated “suspect” into making contradictory statements that can be added up to “probable cause” for seizing the card.

"Can You Prove It?"

“But if the person has proof that it belongs to him for legitimate reasons, there’s nothing going to happen. We won’t seize it,” promises Lt. John Vincent, public information officer for the Oklahoma Highway Patrol. What proof of “legitimate reasons” for having a gift card would an innocent party be carrying? By what authority does a patrol officer decide what is a “legitimate reason?”

Why is it necessary for police to be able to transfer money from a prepaid card to their own bank account, a capability stipulated in the contract for ERAD Card Reader that Oklahoma signed with DHS? Seizing the card and freezing any funds stored on it seems sufficient for prosecution purposes.

The answer seems pretty obvious when we look at what police do with cash seized from travelers, innocent and guilty. The police spend that windfall money on perks for themselves, even pizzas for the Little League teams they sponsor.

"If you can prove that you have a legitimate reason to have that money it will be given back to you. And we've done that in the past," Vincent said about any money seized. He makes it sound as simple as a phone call to the person who gave you the card and his/her affirmation that yes, he gave you the card as a gift. Only it isn’t that simple.

Civil asset forfeiture is a long, expensive, soul-draining legal process, a lawsuit filed by the government against the asset that was seized, not the person from whom it was seized. It takes months or years to get a court ruling that you should receive your money back, and it may be months longer before the law enforcement agency actually gives it back to you. And that's assuming your legal costs don't exceed the amount of money you're trying to recover.

"I know that a lot of people are just going to focus on the seizing money. That's a very small thing that' s happening now,” said Vincent (who, I think, might be better suited for another job). But in a two-month test of ERAD by a small group of Oklahoma law enforcement agents, over $1 million stored on cards was seized. If that still seems “very small,” consider this: civil asset forfeitures now exceed all burglaries in terms of money seized - or “stolen.”

ERAD is not limited to Oklahoma City police and the State Highway Patrol. DHS says that police departments in 24 States have received ERAD devices and are in the process of testing and deploying them.

Is This Unreasonable Search and Seizure?

I've seen other stories about ERAD which claim that the device can siphon funds from a credit card or a bank account linked to a regular (non-prepaid) debit card. Fortunately, that is not true. The damage that ERAD can do is limited to prepaid debit cards.

Still, at least a few politicians see something unconscionable about ERAD. Oklahoma Governor Mary Fallin ordered a halt to ERAD’s deployment on June 14, only a week after the story broke. The Commissioner of the Oklahoma Dept. of Public Safety has been ordered to undertake training to teach exactly what ERAD does… something he admits not having bothered to do before!

“Whether someone has 100 debit cards or one, that in and of itself is not illegal,” state Sen. Kyle Loveless (R), who has spearheaded an unsuccessful push to overhaul Oklahoma’s civil forfeiture laws, told The Huffington Post.

Loveless said he has little confidence that ERAD readers will only be used in the most conspicuous cases. “Law enforcement’s going to say that there are good uses for it and that they use it on a limited basis, but this is deja vu all over again,” he said. “We heard that last year and we’ve seen innocent people’s stuff taken. We’ve seen how [law enforcement] spins it and it’s just not right.”

No, it isn’t. The Fourth Amendment that was intended to protect citizens against unreasonable searches and seizures of their personal effects is in tatters (especially when it pertains to digital matters) but it still clings stubbornly to the Constitution.

Your thoughts on this topic are welcome. Post your comment or question below...

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Most recent comments on "Can This Gadget Suck Money Out of Your Wallet?"

(See all 31 comments for this article.)

Posted by:

Jay R
04 Nov 2016

I think that you missed a much more effective gadget, email. Yours, as well as others, have successfully sucked money out of my wallet. Of course, it was voluntary on my part. Thanx for the continuing flow of great info.

Posted by:

04 Nov 2016

Interesting. Normally on 'Social Issues' there is descent or a devils advocate in the replies. Here I count 13 reply's without a single disecne. THAT ought to tell people that perhaps it's time to REALLY write letters to their congressmen and Seniors at the state and federal levels - not just say that they should. FINALLY something we can all agree (so far) about.

Perhaps as good as any 'one stop' place for addresses:

Just a couple of paragraphs, more than 3 don't really get read, there is an algorithm they use to gauge support for things like this, independent, non circulated 'e-petions' get more points. Phone calls the the most. E-petions get the least - I don't know the point system now, but when writing was allowed, a letter got 10 points, a phone call 6, and a petition 2 points. Meaning a single letter represented 10 voters, phone calls represented 6 voters, petitions represented 2 voters.

That was YEARS go, I don't know what the 'points' are now. But there you go- a link to fire off a line if you want - you can bitch here, or you can do something other than grumble. I'd rather stop grumbling and do something - (remember some funding of your elected comes from those seized funds -- it's ONE reason why cops have military 'breach' vehicles will full anti-IED armor)and full auto Ma-duces or m-60's on the turret.

Or you could just mutter how 'bad' it is.

Posted by:

04 Nov 2016

Yet another example of so-called law enforcement agencies in the USA bending the Constitution into a pretzel in order to 'protect the law-abiding' by stealing money from the innocent wherever they can. Thank heaven I no longer live in the USA - this has given me another reason never to go back there.

Posted by:

04 Nov 2016

Since when do you have to prove something belongs to you. Don't the F****ng cops have to prove it is not.
It is the cops we should be worried about.

Posted by:

04 Nov 2016

What are the police going to be able to do next-seize your home?

Posted by:

Ct Paul
04 Nov 2016

Geeze Bob, I am surprised to see you say that some policemen are thieves and not the exalted demi-gods so many people began to worship after Sept 11 2001.

You know, I never did understand this deification of a bunch of civil servants who were simply doing the job that they were well paid to do when the planes hit the 2 towers and the Pentagon. I spent 12 years as a Civil Servant (but not a cop) and several older friends died on the job. Just because a bunch of people die at once because of a shared event they don't stop being dead people and become something more. If the former were true than everyone who dies today because of the flu should be deified, as well as all people who die of throat and lung cancer today because of cigarets. The list goes on... But 9/11 was different, you say... Why? Because so many people have limited imaginations? All the 1st responders died doing their job. They had a contract with the city to do certain things for their getting a regular paycheck. Death was always a possibility. (Oh you want to bring up the off-duty personnel who gave their lives? Don't! I'm on a roll!)

But seriously, it seems to me that the terrorist acts of 9/11, and the lap-dog media, put cops on a pedestal that has gone to their collective heads. We are not quite in "Judge Dredd" territory yet, a future in which cops have been given the power to be Judge, Jury, and Executioner. Before we get to that point we need to reign them in.

Posted by:

Bob Greene
04 Nov 2016

Outstanding article, reviewing the ERAD card against current and potential abuse. By all measures, ERAD technology is a clear case of Big Brother-style "mission creep".

With digital data, we citizens are often the last to know when our rights have been violated. From DRM user-limiting provisions of software to all areaa of personal privacy, the digital rights issue begs for public discussion and for appropriate protective legislation. Where is that discussion, today?

Obviously, we should not have to defend our civil rights against abusers of our rights. So, must we prove to police we own our property, or that our free speech is permitted? It is the police who are under obligation to observe due process, first and foremost-- that is what distinguishes rule of law in a democracy from a police state (Russia or China).

Digital data is here to stay, but citizens and consumers must realize the danger of not speaking up to defend their rights. If they do not defend themselves, who will?

Posted by:

04 Nov 2016

Maybe if enough people had their funds taken and it is legally theirs, a class action suite against the Oklahoma State Government is necessary. Litigants would sign over small amounts to litigating law firm to make it worth their while (even if it amounts to a million dollars) just to have satisfaction of costing government lots to defend. Could be done as many times as necessary.

Posted by:

05 Nov 2016

Frank asked: "What are the police going to be able to do next-seize your home?"
Yes they can. They can claim it was being used to distribute drugs or that it was purchased with illegal money. The frequently seize vehicles. Coast Guard can seize your yacht if there is one m*riju*na cigarette aboard. It is called zero tolerance.

Posted by:

05 Nov 2016

Yikes ! ! !

Posted by:

05 Nov 2016

How in the world could anyone think this is ok?!

Posted by:

Dave Fox
05 Nov 2016

Are there no depths to which those PRICKS will not sink. We the people are under assualt from this G..D... thing we call a government.

Posted by:

05 Nov 2016

This is a bit misleading. Prepaid cards don't have "personal information" on them. And this isn't RFID sniffing, either: it requires swiping the card through the ERAD reader.

Having said that, there certainly is room for abuse here: "Answer all my questions or I'll freeze your card and you won't be able to buy groceries". Civil forfeiture in general is pretty sketchy.

Posted by:

05 Nov 2016

As a retired Australian Federal police officer I just want to add my own remarks as I actually get a bit tired and frustrated with some of these comments. I have no doubt Bob's facts are correct. Opinions, to which we are all entitled, are different. Here in Australia in my time, it was a continual battle with new and emerging technology, to overcome the criminal elements rush to pick it up and to then utilise to avoid, or hide from, the law. We struggled with our arms tied behind our backs by LAWS, things that do not apply to criminals, until they get caught.
I do not know whether these 'ERAD' devices are covered by the law but if not, then they should be. Look to your politicians for this, not the coppers.
And of course, there are always going to be 'bent' coppers, but, for a group of public servants, paid to do a job that continually requires most of them to respond to matters, all day and every day, that puts them in situations that could threaten their well being or even their lives, well instead of hitting on them continually, how about some respect and acknowledgement of the GOOD things that most of them do.

Posted by:

05 Nov 2016

This issue could be small potatoes after next Tuesday when a Putin loving buffoon is elected to lead the USA and we here in Canada are faced with refugees streaming across the border. From the perspective up here it appears that sanity is an affliction suffered by a small minority down there and the world may end up looking for salvation in Elon Musk.

Posted by:

05 Nov 2016

Unless you are strip searched, which requires probable cause, there is no legal reason for them to ask to see your credit/debit or gift cards. And they won't be able to detect them if you keep them in an aluminum case wallet; separate from the wallet you keep your driver's license and proof of insurance in. This also keeps a person with the right equipment from reading your card number when you're close to them, such as when you're inline to pay for purchases in stores. My credit card company sent me a text asking me if I bought an items worth well over $1,000; when I said I did not, they advised they would immediately close that card and send me a new card with a different number. That's when I bought my aluminum wallet case. Cheap insurance for the price of a burger.

Posted by:

06 Nov 2016

Go figure in OK. They still have toll roads managed by corporations that claim they have not been paid for in all the years they've been in operation. I guess they think that since there isn't too much there for tourism, they have to find new and innovative ways to extract money from travelers. I really hate that the state lay right in the middle of where I have to travel often. Oh, and every time I enter the state I smell a skunk almost immediately, I guess it's the welcoming party.

Posted by:

06 Nov 2016

If you think this is bad, read the book titled "Rise of the Warrior Cop: The Militarization of America's Police Forces" by Radley Balko.

Amazon link: -- or check your local library.

It covers civil forfeiture in depth, as well as other outrages, like: 2:00am no-knock warrants served at the wrong address, resulting in deaths of innocent people; massive over-use of SWAT teams for routine police activities; and a federal program that transfers surplus military hardware and weapons to police agencies (because every small-town PD *needs* an APC with mounted .50-cal machine gun!).

Posted by:

07 Nov 2016

Charles, don't rag on the whole state just because you have to pay for the road your are using. I have come to embrace toll roads since the people using them are paying for them, with a pike pass it is easy going. It really is a beautiful state with 8 eco-systems, no state has more. Slow down from the posted limit of 75, on the turnpike, maybe take some other roads. Is it perfect? No but regardless of what others may think, I haven't been to a perfect state yet.

Posted by:

Monte Crooks
07 Nov 2016

In Arizona, we are being required to purchase a "new" $25 RFID Driver's License in order to board a plane. Soon, it will be required to cross State Lines in your own vehicle! To obtain the new license, you must provide the same info as you do for an International Passport. I remember that a couple years ago I was laughed at as a conspiracy theorist for saying that it won't be long before a passport will be required for American Citizens to travel between States, but that's another problem. The worst for all of U.S. right now is that ANYONE with an ERAD (or just a cheap RFID) Reader can stand near someone with the new license and know enough about you to OWN you. At least it's not a theory anymore!

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